The AUD/NOK pair had a fairly bullish session on Friday as you see the last couple of sessions have been quite strong for the Australian dollar. Essentially, this pair measures gold versus crude oil, and as such is a very interesting one to watch as it could show potential flow of commodity markets going forward.
The Australian dollar should continue to do quite well in general, as the Chinese economy seems to be doing reasonably well despite what's going on around the world. Chinese numbers continue to be rather robust, and this of course will push the value the Australian dollar higher as China is Australia's largest customer when it comes to exporting raw materials such as copper, aluminum, and gold. This puts an automatic bid in for the Aussie dollar when economic activity is relatively strong, or at least steady.
On the other side of the equation is the Norwegian krone. The Krone is driven mainly by oil prices as the Norwegians are one of the most prolific drillers of oil in the North Sea. Because of this, a lot of money flows out of Europe and into Norway when crude prices rise, which of course is a byproduct of demand. As a result, the demand for Kroner should continue to push the value of the NOK higher. Because of this, this is essentially a barometer of where you should be putting your money, into gold or oil.
Key resistance level and moving average
The 5.95 level is an obvious resistance area in this currency pair, and the fact that we failed to close above it at the end of the day on Friday suggests that we could get a little bit of a pullback. Also, you can see on the chart there is a 100 day exponential moving average plotted, and this of course is right at the top of the candle. Because of this, I believe that the Monday session would be very important in this currency pair.
I cannot think of a better place to see a resistant candle form in order to start selling. This of course would be predicated upon the idea of the price of oil rising during the session, but having said that we simply must wait for the close. This is the type of area that can determine the next couple of hundred pips, so I believe that waiting for the daily close is vital.